Regardless of your age or level of wealth, you must have an estate plan in place. Estate planning protects your assets, but it also protects you and your family members.
While will creations are a crucial aspect of protecting your assets, here are a few more estate planning documents you must have in place. By taking these considerations, you can rest assured of a smooth and stress-free process for your executor and family.
Beneficiary designations
Life insurance policies and retirement accounts allow you to name a primary and contingent beneficiary. If the information on these accounts differs from what is in your will, the beneficiary designations will supersede it. As a result, you must update your beneficiary designations along with your will after significant life changes. This includes new marriages, divorces, and the birth of a new child. You should also review your complete estate plan at least once every three years.
Power of attorney
A power of attorney gives another person authority over your financial accounts. This authority allows that person to handle matters on your behalf if illness or injury leaves you incapacitated. Family members, friends, spouses, siblings, and adult children can all serve in the role.
Health care proxy
Much like a power of attorney, a health care proxy is a person authorized to make medical decisions on your behalf when you cannot. They can communicate wishes for end-of-life care should you experience a serious accident or illness. Many people also develop a living will, which expresses their wishes in writing.
Trusts, long-term care planning, and establishing guardianship for minor children are equally important as the above estate planning tools. Carefully review your needs to determine which tools work best for you.
